The International Energy Agency (IEA) is the oil monitor for the 33 OECD nations. They are paid large sums of money to study and report on energy production and demand. It should come as no surprise that their annual World Energy Outlook (WEO) is skewed with a political bias.
The IEA has come a long way in the last five years. For a very long time they did not even recognize the potential for peak oil. Last years report did not even contain the words peak oil. This year they claim peak oil has already passed BUT they are still predicting higher annual demand growth through 2035.
If oil production has already peaked how can it continue to grow for 35 more years? Reality has always been difficult for the IEA. They are tasked with putting a positive spin on their reports so as to not agitate the consumers in the 33 OECD nations.
For the prior 2-3 years the IEA blamed insufficient investment in energy for the potential for shortages in the future. They claim with enough investment there will always be oil growth. This year they are counting on efforts to combat global warming as the magic bullet that will keep oil prices reasonable for the next 35 years.
They can't point to concrete production numbers, proven reserves and capex expansion plans to take global production to 105 million barrels per day from our current 86 mbpd. Those numbers don't exist because the global reserves don't exist. Instead they resorted to adding things like alternative fuels, natural gas liquids, oil sands, shale oil, etc.
They took the unorthodox step of admitting that peak oil had already occurred in 2006 but they are confusing the issue by quoting barrels per day including all the other forms of liquids to take oils place.
Here are some facts from the WEO report. Last year they predicted 106 mbpd of demand by 2030. That would be an increase of more than 20 mbpd from our current level. This year they are only predicting demand of 99 mbpd by 2035.
The IEA predicts OECD oil consumption will decline from the current 41.7 mbpd to 35.3 mbpd by 2035 while non-OECD nations will increase consumption by 19 mbpd. More than 12 mbpd of demand will come from China and India.
The IEA noted that since 1980 we have consumed more than twice as much oil per year than we find. We currently consume over 30 billion barrels per year and find just over 10 billion.
In order to meet the IEA demand estimate of 99 mbpd by 2035 the IEA says we will have to find and begin producing more than 900 billion barrels of oil. At the discovery rate over the last 30 years it would take 90 years to find 900 billion barrels.
The non-OPEC nations will need to have produced more oil than currently in their reserves and by 2035 they must still be producing oil at 46 mbpd. All is geologically impossible.
The IEA admits that fields producing 68 mbpd at the end of 2009 will decline to only 16 mbpd by 2035. That is a decline rate of roughly 8.3% and is consistent with other research.
The IEA continues to project demand numbers for decades into the future but fails to follow up with data on where that oil will come from. This is a fatal flaw in their credibility.
You can't get 64 ounces of soda out of a 32 ounce cup just because the first 24 ounces came out at a certain speed. You can't multiply that initial speed for days ahead because there will be a sudden halt to production when the bottom of the cup runs dry. The IEA just assumes the wells will never run dry in their demand projections.
Noted peak oil analyst Kjell Aleklett claims this grossly padded WEO is a cry for help by the IEA. For political reasons they can't just say production will begin declining on X date because the 33 countries have been depending on their analysis of production for many years. If they drop the curtain on their magic trick and show there is a production peak in our future the OECD nations would have to immediately begin planning for a decline in transportation sometime in the next three years.
Jimmy Carter tried to tell America there we an energy shortage in our future, turn down your thermostats and put on a heavy sweater. While he was doing the right thing he was booted out of office in the next election. Americans don't like to be told they must conserve and quite a few consumers in the other 32 OECD nations fell the same way. The IEA would lose its credibility and its financial support.
Anyone who believes the IEA report is an idiot because it is filled with lies and subterfuge. Strangely the lies are not even well thought out. It is though they were trying to warn us by being so absurd that anyone with a brain would say this does not make sense and start looking for the truth elsewhere.
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